I contributed to an HSA, wife contributed to FSA. Is this not allowed?

[Traveling2019]

1. I am on an Individual HDHP. I maxed out my 2019 HSA.
2. Spouse is on a PPO and contributed 2K to her FSA for 2019 (the standard one that can be used for medical expenses).

Her FSA does appear to allow expenses to be used for me if we choose. I did use about $500 of it, but we have the option of refunding that back to the FSA. 

In our benefit meeting at work today, they alluded to something which made me research if this was allowed. I never thought about it until today because in my mind we are on different plans.

1. In our scenario, is having an HSA and FSA not allowed?
2. Does it make a different if I didn't use the FSA or not?

Assuming the answer is now allowed. What is the best course of action at this point. Can we pay the penalty on the FSA since that is the smaller amount.

Finally, I assume if what we did is not allowed, the smart thing to do would be for me to get the HSA and she to decline the FSA completely.

[Anonymous]

if your spouse participates in a Healthcare FSA or HRA, and those benefits cover your healthcare expenses too, then no, you are not eligible to participate an HSA. Why? Even though you are not covered by your spouse’s health insurance, the IRS considers your spouse’s Healthcare FSA or HRA to be “other insurance.”

based on your saying that her FSA can pay for your medical expenses, you can not have an HSA

makes no difference whether her FSA is used for your healthcare expenses or not.  the key thing being could it be used. 

withdraw all money left in the HSA any used will be subject to penalty.

xcs

[Traveling2019]

This one has thrown me threw the loop. 

The FSA has been spent down to $0. My HSA is close to the max of $3,500. The employer contributed $1,250 and I'm still employed there. Can we put down the whole FSA as excess on the tax return to take that to $0 and leave the HSA as is. I don't even see a way to get the HSA money out for non-medical expenses.